Friday, 5 April 2013

QE will never be Reversed - Woodford

Columbia Professor Michael Woodford, the world's most closely followed monetary theorist, says it is time to come clean and state openly that bond purchases are forever, and the sooner people understand this the better.

"All this talk of exit strategies is deeply negative," he told a London Business School seminar on the merits of Helicopter money, or "overt monetary financing".

He said the Bank of Japan made the mistake of reversing all its money creation from 2001 to 2006 once it thought the economy was safely out of the woods. But Japan crashed back into deeper deflation as soon the Lehman crisis hit.

"If we are going to scare the horses, let's scare them properly. Let's go further and eliminate government debt on the bloated balance sheet of central banks," he said. This could done with a flick of the fingers. The debt would vanish.

Lord Turner, head of the now defunct Financial Services Authority, made the point more delicately. "We must tell people that if necessary, QE will turn out to be permanent."

Followers

United Kingdom Investors in Junior Gold Stocks - ISA Eligibility

United Kingdom (UK) Investors seeking exposure to Junior Gold Stocks may wish to ensure that profits are free of capital gains tax.

This can be achieved by holding stocks in an ISA account. Current allowances are over £10,000 pa for both yourself and a spouse if you have not already subscribed to cash ISAs.

Any "Main Board" stocks can be held. With regards to junior gold stocks referenced here this means you can hold any stocks listed on the Toronto exchange, ".TO" on stock ticker references within an ISA. Australian stocks .ASX can also be held within ISAs and this can give exposure to very junior companies, although the Australian market is an area I have not had much exposure to.

You will not usually be allowed to hold Canadian Venture exchange stocks, ".v" ticker references within an ISA account. AIM stocks are also now ISA eligible.

UK Investors can realise capital gains of approx £10,000 pa before capital gains tax becomes due, with two allowances for both yourself and a spouse and you may roll forwards losses.

I have found TD Waterhouse, now TD Direct in the UK to provide very easy dealing on the Canadian exchange. Therefore ensure you realise gains before the new April UK tax year within your allowance and consider realising losses to roll forward.

NOT SMALL PRINT - DISCLAIMER

At all times I may have invested in what I find, I may have identified the stock only to watch while I concentrate on other investments, I may have sold taking profits or losses. I am not an advisor. Although I attempt to find good information it may not be accurate. Links to other sites are of interest to me but I do not offer recommendation of their accuracy or agenda. If you want to invest in this area you must do your own due diligence, it is your money. You have not paid for my research or views.This is a very risky area and can really only be defined as speculation, not investment.